
The economy of the 00s was built on millions of personal Ponzi schemes. The residual debt from their collapse weakens the recovery. Many people fail to budget properly for unexpected expenses or expenses that do not occur monthly. When these expenses occur, most will borrow the money, often on credit cards; this debt accumulates like tooth plaque, and at the end of the year, many debtors hope for a work bonus or a tax refund to scrape the debt from the family balance sheet. Homeowners, particularly in California, utilize the housing ATM and add to their mortgage to pay for these un-budgeted expenses of daily life. The sad reality is that this method of Ponzi borrowing can work as long as (1) the amounts added to the home mortgage are…[READ MORE]